The Rise of Blockchain in Data Centers

Posted by Instor on Jan 10, 2018 9:00:00 AM

Today, cryptocurrency is a hot-button topic. The believers and the nonbelievers can get into passionate debates on the subject. However, there seems to be a consensus that blockchain, the underlying technology of cryptocurrency, is an important innovation.

 

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Image: Pexels

 

The Blockchain: What it Means to You

These days, everything from financial services to smart cars, healthcare CRM systems, e-commerce sites, government services and voting applications are getting in on the blockchain action. Blockchain related products and services are expected to reach $7.7 billion by 2022.

The rise of blockchain is having a domino effect. The data center industry is also seeing changes, which means it’s time to pay attention to Bitcoin, Ethereum and other cryptocurrencies.

Blockchain: A Simple Introduction

Blockchain uses complex mathematics of cryptography to achieve its goals. But the idea behind blockchain is relatively easy to understand.

Throughout history, buyers and sellers required a third-party to verify any form of transaction. The duty of the third-party was to establish trust. In ancient times, it was a village elder. Today there are banks and financial institutions that serve this purpose.

Blockchain provides a way to set up a trustless transaction process. It achieves this through creating blocks on a distributed network. As new transactions arrive, those are put together into a block and added to the blockchain. You can think of the blockchain as a digital ledger or a distributed database.

The records on this digital ledger are immutable. If someone tries to manipulate even a single bit of the blockchain, the mathematics of cryptography allows users to see the fraud. As there are multiple copies of the same blockchain distributed throughout the network, users can ignore the corrupted blockchain and get a new copy easily. This means transactions on the blockchain are both transparent and secure.

A great use of blockchain is smart contracts. They are executable programs on the blockchain. Ethereum is an example of this. Smart contracts can be used to automatically execute tasks. Using smart contracts, a company can design their payroll to pay employees or a gambling institution can design a system to run bets. Because the records are permanent and verifiable, it is a great way to establish trust.

Blockchain and the Data Center Industry

The blockchain is changing the data center business in multiple ways. Here are some things to look out for:

More Data Center Applications

Smart contracts are allowing data centers to implement capacity planning, cooling, asset management and virtualization on the blockchain. These changes are leading to cost and time savings. Data center operators can look forward to more blockchain-based applications available in the coming years.

Boost to Data Center Usage

Cryptocurrencies are the highest users of blockchain technology and this is creating new opportunities for data centers. Companies dealing with cryptocurrencies were the largest users of IBM’s 60 data centers last year. The use of data centers for cryptocurrencies will continue. Even though NVidia has limited the use of its graphics cards for data centers, it is still allowing the cards to be used for blockchain.

The Looming Threat of Rising Cryptocurrencies

Cryptocurrencies are also making data centers a big target for cyber attacks. With the prices of Bitcoin, Ether and Litecoin rising, it’s becoming more lucrative to attack data centers that support cryptocurrencies. In 2018, data center operators who have cryptocurrency related applications must be more vigilant.

Blockchain and the Cloud

Today’s cloud computing is centralized. The future cloud could reside in small pieces all around the world. Researchers are working on developing this technology using blockchain. It can change the data center architecture fundamentally.

The blockchain is changing the world in more ways than one. Data center managers and operators need to be aware of the changes, so they can prepare and stay ahead of the curve.

Learn more from Instor on how to keep your data center secure.

 

Topics: blockchain